China economic boost may lift Macau
Macau casinos generated gross gaming revenue (GGR) of MOP57.65 billion (£5.4 billion/€6.3 billion/$7.21 billion) in the first quarter, a modest 0.86% year-on-year increase. Of that, nearly 60% came from mass-market baccarat, reports the city’s Gaming Inspection and Coordination Bureau.
Mass baccarat dropped 0.76% year-on-year in 2024, but it grew almost 15% from the same period in 2019. Meanwhile, VIP baccarat generated MOP14.45 billion, up 0.54% over last year, but down 61% compared to 2019.
In comments before the Legislative Assembly on 14 April, Macau Chief Executive Sam Hou Fai acknowledged that GGR for the year will likely fall short of the government’s target of MOP240 billion — a goal that requires MOP19.2 billion in GGR per month. If revenue slips below that level, Macau “would immediately be running a budget deficit” for the year, said Sam.
But if China stimulus measures work as planned, visitors to the city may be more willing to open their wallets. On 18 April, China Daily reported that Asia’s largest economy expanded 5.4% in the first three months of the year, exceeding the projected 5.2%.
Morgan Stanley strategist Xu Changtai called first-quarter GDP growth a “modestly positive indicator” of healthy momentum.
Mass market edging VIP segment
The shift to mass-market gaming is a sign of the changing times. In recent years, Beijing has intensified its crackdown on capital flight, unlicenced money exchanges and junket operations, putting a dent in the once-dominant VIP segment.
According to Macao News, junkets, which provide transportation, accommodations and casino credit for high rollers visiting Macau, once accounted for as much as 60% of GGR. Their downfall began when two industry kingpins were arrested and charged with illegal gambling and fraud.
In 2023, Suncity boss Alvin Chau was sentenced to 18 years in prison. Several months later, Tak Chun founder Levo Chan got 14 years. Their convictions sent some VIPs into hiding and caused a shift toward mass and premium-mass gaming in Macau. Since 2014, the number of junket operations in the city has dropped from 235 to just 24.
Growth should accelerate in Q2
CSLA analysts Jeffrey Kiang and Leo Pan have tied the slump to a weaker yuan and simmering US-China trade tensions. They predict GGR will grow an anemic 1.8% this year, reaching just MOP230.8 billion.
“While we think growth in 2025 will be minimal, this should accelerate in 2026 based on our property team’s view that Chinese property prices will gradually bottom out in [H2 2025], which we see as a key driver for consumer confidence in China,” they said. They also expect tourism to Macau to expand 2.6% in 2025 and 2026 and grow 4.6% in 2027.
Seaport Research analyst Vitaly Umansky advises casino investors to look for improvement in the second quarter of 2025 and the rest of the year, “especially with heightened concern around any potential slowdown in Asia due to the Trump tariff regime and a potential US recession”.
However, he added, “gaming stocks remain intrinsically undervalued, especially the Macau companies. … In Macau, growth has hit a wall, and we reduced our growth expectations for 2025. But we do expect an acceleration of growth in the second half of the year. … We now forecast GGR growth of 3%” in the world’s foremost gaming market, he said.